WIREDGOV

• Complaints fallen by 20 per cent in last two years
• Drinking water quality remains up there with the best in Europe
• Companies commit £38 million of own money following leakage failures

Ofwat, the economic regulator of the water and sewerage sector, has reported that although companies continue to deliver good levels of service to most consumers, there are still areas for concern.

Each year Ofwat scrutinises how 21 companies performed in delivering services to customers in England and Wales. Its 2010/11 “summary of performance” report shows that in many areas companies are performing well:

• complaints have fallen by 20 per cent in the last two years and overall satisfaction with the way companies deal with contacts and concerns is high;
• drinking water quality remains up there with the best in Europe; and
• the number of incidents of properties suffering internal sewer flooding was lower than any of the previous four years.

Yet there are areas for concern:

• six companies failed their leakage targets (Anglian, Dŵr Cymru, Northumbrian - North East operating area, Severn Trent, Southern and Yorkshire);
• seven companies need to do more to maintain their underground infrastructure (Anglian, United Utilities, Northumbrian, Severn Trent, Southern, Veolia Water Central, Yorkshire); and
• a high number of supply interruptions to customers. Ofwat has particular concerns about the performance of Severn Trent in this area.

In June, Ofwat announced that fifteen water companies met their leakage targets in 2010/11, reducing leakage by a total of 18 Ml/d (million litres a day) – the equivalent of supplying a city about the size of Exeter with water for a year. But six companies failed to meet leakage targets.

Although investigations showed that none of the failures threatened customers’ water supplies, Ofwat takes such failures seriously. As a result, Yorkshire Water has committed to spending around £33 million of their own money tackling leakage and improving their pipe network. Southern Water will return £5 million to its customers for failing to deliver its planned reduction in leakage. Ofwat has put Anglian, Dŵr Cymru, Northumbrian - North East, and Severn Trent on report for their leakage failures.

Regina Finn, Ofwat Chief Executive Officer said:

"People can shop around for the best deal on many things, but not water. We are here to make sure customers get a fair deal. Services continue to improve, but this is no time for complacency.

“Where we have concerns about companies’ performance, we have made sure there are action plans in place to put the problem right, at no extra cost to customers.

“Customers tell us that leakage is an issue that matters to them. They need to have confidence that their company is doing their part to use water wisely. These failures send a poor signal about how companies value water.

“Leakage has reduced by around a third since its mid-90s peak. Most companies stepped up to the challenge of tackling leakage during another very cold winter. Those who didn’t, need to get back on track. Companies will be paying out around £38 million from their own pockets to fix these problems.”

Ofwat has also today published results of companies’ performance on customer service. This is the first year Ofwat has published results of its new customer service measure - the Service Incentive Mechanism (SIM). The SIM aims to make companies more customer-focused and improve customer service.

The results show that in general companies are performing well, but that some companies need to improve to catch up with the best performers.

The overall number of complaints is falling, with a 20 per cent decrease in the number of written complaints in the last two years. Customer satisfaction with the overall manner in which companies handled their contacts and concerns was high. Ofwat asked 17,000 customers to give their view of how well their company did on a scale of 1 to 5 (where 5 indicates they were ‘very satisfied’). The average score of all the companies was 4.2. This ranged from 3.79 (United Utilities) to 4.59 (Veolia Water East).

A full breakdown of results is available to view in Ofwat’s report “Service Incentive Mechanism (SIM) 2010-11”, while the overview of companies’ overall performance is available at “2010 -11 Summary of Performance report”.

Notes to editors

1.Ofwat (The Water Services Regulation Authority) is the economic regulator of the water and sewerage sectors in England and Wales. It exercises its powers in a way that it judges will protect the interests of consumers, promote value and safeguard future water and sewerage services by allowing efficient companies to carry out their functions properly, and finance them.

2.2010-11 company leakage failures.

* Companies who also failed leakage target in 2009/10

3.The leakage failures occurred in the context of the second coldest winter in England and Wales since 1995/6, with only the 2009/10 winter being colder. Cold weather can make tackling leakage harder. Snow covered ground can make identifying leaks more difficult, and all companies reported high numbers of burst pipes because of ground movement caused by freezes and thaws.

4.Ofwat has previously taken action against companies following serious and consistent underperformance on leakage. Thames Water (in 2006) and Severn Trent (in 2007) committed a combined total of an extra £195m of their own money to address failures. Since then, both companies have significantly improved their leakage performance. Although Severn Trent has failed its leakage target by 3% for 2010-11, it met its leakage target for the previous three years (2007/08, 2008/09, and 2009/10).

5.The number of written complaints received by water companies has dropped by 20% in the last two years – from 232,854 in 2008/09 to 185,140 in 2010/11.

6.Media enquiries to Ofwat Press Office on:

• Benedict Fisher on 0121 644 7642 / benedict.fisher@ofwat.gsi.gov.uk, or
• Harbinder Babra 0121 644 7616 / harbinder.babra@ofwat.gsi.gov.uk